How much does a Debt Collection Agency charge?
How much does a debt collection agency charge
When it comes to how much a does a debt collection agency charge, the answer is not usually straightforward.
The cost of a debt collection agency’s services can vary depending on the type of service they provide, how long it takes to recover the money owed and other factors. The value of the debt owed and the age of the debt usually come into play. Also the type of debt it is and what it is owed for are a major factor.
Generally speaking, in terms of commission, on average debt collectors can charge between 10-50% of the amount recovered as commission. An administration or instruction fee will likely be charged by the more professional companies due to the depth of service. This is because more resources and effort are ploughed into the recovery of the debt thus maximising the possibility of the debt being collected.
Different types of debt collection agency
Depending on your needs, there are standard types of debt collection agencies you can use:
- Personal Debt Collection Agencies specialise in the collection of debts owed by an individual usually. They can act on behalf of businesses or private persons who are owed money. The cost and commission rate tends to be higher for these type of debts as there is greater risk to the debt collection agency in terms of cost.
- Business Debt Collection Agencies deal largely with B2B Debt Recovery and B2B Debt Collection matters. The commission rate tends to be a little lower for these kind of debts compared with personal debt collection.
- Portfolio debt collection Agencies specialise in collecting on delinquent accounts en masse. These can include types of debt such as utilities, mobile phone debts and such like. Debts are placed in large quantities and usually chased up by call centre debt collection operations. It is purely a numbers game normally as opposed to each case being personally managed and actioned.
- International Debt Collection. This type of debt is self explanatory. The costs associated with this type of debt collection are usually much higher for obvious reasons as the cost is far higher to the debt collection agency.
Debt Collection agency charges explained
It is important to remember that how much a debt collection agency charges can vary greatly. This is mainly depending on how quickly they are able to recover the debt and how many resources they need to use. Additionally, some collection agencies may charge an upfront fee or minimum fee before starting work on a case. Ultimately, it’s important to do your research before hiring a debt collector as this will help you make sure you get the best service at the best price.
The best debt collection agency will not be the cheapest. Furthermore, the cheapest will not get the results the best will. Common sense applies and basic business logic. Checking out debt collection reviews for the company will enable a diligent decision making process.
To summarize, how much a debt collection agency charges can vary depending on how much money is being recovered. Also, how long it takes to recover the debt and what type of services are needed. Before hiring a debt collection agency, it’s important to take all these factors into account in order to make sure you get the best possible solution.
Low Cost Debt Collection Agency
As stated previously in this article, cheap is not cheerful however debt collection need not be expensive. If you are focusing on getting the best results, you need the best service for your particular niche. At Frontline Collections we specialise in a cross sector of different working environments including veterinary debt collection, dental debt collection and personal debt collection services to name a few.
If you have been asking how much does a debt collection charge, then you might have just found your perfect solution. Recover more for less and contact us today for free help and advice with your problem.